Rajesh Gandhi Vs Sanghpriya Singh (ITAT Delhi)
153C Addition for Property Deal Quashed as AY 2012-13 Falls Outside Permissible Ten-Year Search Block
Based on a seized receipt found in a 2020 search of a third party, the Assessing Officer invoked section 153C and added ₹68 lakh under section 68 for AY 2012-13, alleging unaccounted consideration in sale of a flat by the assessee.
Before the Tribunal, the assessee contended that the proceedings were time-barred. Crucially, the Revenue could not produce any satisfaction note under section 153C showing when the seized material was handed over to the AO of the assessee. In such absence, the Tribunal treated the date of issue of notice under section 153C (27.05.2022) as the deemed date of recording satisfaction and therefore as the deemed date of search for the assessee.
Applying the law laid down by the Supreme Court in Jasjit Singh and the Delhi High Court in Ojjus Medicare Pvt. Ltd., the ten-year block for section 153C had to be counted backwards from AY 2023-24 (the year relevant to FY 2022-23). This block covered only AYs 2014-15 to 2023-24.
Since AY 2012-13 lay outside this statutory block, the AO had no jurisdiction to assess that year under section 153C. The assessment order for AY 2012-13 was therefore held to be barred by limitation and was quashed without examining the merits of the ₹68 lakh addition.
For later years (AYs 2019-20 to 2021-22), the CIT(A) had already set aside the assessments and fresh effect-giving orders made no adverse additions, rendering those appeals infructuous and hence dismissed.
Accordingly, the appeals for AY 2012-13 were allowed by quashing the assessments, while the appeals for AYs 2019-20 to 2021-22 were dismissed as infructuous.
FULL TEXT OF THE ORDER OF ITAT DELHI
